1. NETWORK SEGMENTATION ‘A focused approach to value creation’

2. LEARNING OBJECTIVES …to understand the value of segmentation in a focused operations strategy …to understand the value of targeted product offers

3. CUSTOMER SEGMENTATION The perception of value is distinct to the particular customer The value of the customer to the firm Transaction customers vs. Relationship customers Trade-off between effectiveness and efficiency

4. TARGETED PRODUCT OFFER Product Price Promotion People Process Physical Evidence

5. NETWORK SEGMENTATION PRODUCT SEGMENTATION CUSTOMER SEGMENTATION ADDED VALUE SALES CHANNEL OPERATIONS STRATEGY CUSTOMER

6. THE PRODUCT LIFECYCLE THEORY Stages Features IntroductionGrowthMaturityDecline DemandLowRisingSteadyFalling Product DesignChangingSome ChangeStandardAdjustments ProcessSmall ScaleLarger ScaleMass ProductionAdjustments Selling PriceHighFairly HighLowerLow Total RevenueLowRisingPeaksFalls Unit CostsHighFallingLowerVariable ProfitLowRisingPeaksFalls Number of Competitors FewRisingStableFalling Focus on Operations Flexibility, Reliability Scheduling, Capacity Cost Reduction, Productivity Cost Control, New Products Source: Waters, 2000

7. PRODUCT SEGMENTATION Commodities Basic products Long lifecycle Focus on waste reduction Fashion products Seasonal or short-season products Short-life cycle Focus on production flexibility and responsiveness

8. ELIMINATE WASTE Eliminate overproduction Minimise waiting time Right product to right place Efficient processing Standardised process Operations focus Inventory control Zero defects

9. RESPONSIVE OPERATIONS STRATEGIES Rapid replenishment Just-in-Time Organisational agility Postponement Mixed Supply Base Pareto curve approach Base and surge demand

10. CHANNELS TO MARKET (B2B) PRODUCER AGENTS B2B DISTRI- BUTOR AGENTS B2B DISTRI- BUTOR BUSSINESS CONSUMERS BUSSINESS CONSUMERS BUSSINESS CONSUMERS BUSSINESS CONSUMERS E FGH

11. CHANNELS TO MARKET (B2C) PRODUCER AGENTS WHOLE- SALERS WHOLE- SALERS RETAILERS CONSUMERS A BCD

12. RETAIL FORMATS Specialist independents Value retailers Department stores Boutiques Catalogue retailers Factory outlets e-tailers Franchise

13. THE FOCUSED OPERATION Customer Needs Value Drivers Customer Use Situation VALUE PREPOSITION Value Creation CUSTOMER SATISFACTION Cost of Purchase/ Production Production Needs

14. NETWORK VS. NETWORK FIBER SECTOR TEXTILE SECTOR FINDINGS SECTORRETAIL SECTOR CLOTHING SECTOR Natural Fibre Man-made Fibre Yarn Production Weaving Knitting Fabric Finishing Cutting Garment Finishing Sewing Clothing Findings Production Retail Sales

15. HOW TO GO AHEAD AND STAY AHEAD Focus on core capabilities Targeted production strategies Discriminate between customers and sales channels Understand relationship between supply and demand Align people around the vision Closer working relations between functions Closer working relations with supply chain partners